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Put Options Allow You to Hedge or Profit from Market Downturns
An NFT put option gives the holder the right, but not the obligation, to sell a specific NFT at a predetermined price at a later date. In simpler terms, you can reserve a price to sell an asset in the future and minimize your downside.
NFT put options can be used in various ways, such as to hedge (buy cash insurance) against the risk of falling NFT prices or to profit from the downfall of a collection's floor.
NFT put options have several key components, including:
- Strike Price is the price at which the holder can sell the NFT.
- Expiration Date is the date by which the holder must decide whether to exercise the option.
- Premium is the price the holder needs to pay to purchase the option.
Got a minute? Check out how to purchase a put option: